Carrefour Quarterly Sales Growth Tops Estimates on France

  • Carrefour CFO sees an attainable full-year profit goal
  • Shares of French retailer have fallen by 11 percent in 2016

Carrefour SA, France’s largest retailer, reported third-quarter revenue that beat analysts’ estimates on stronger-than-expected growth in its home country.

Sales rose 3.2 percent on a like-for-like basis to 21.8 billion euros ($23.9 billion), Boulogne-Billancourt, France-based Carrefour said in a statement Wednesday. Analysts expected 21.7 billion euros. In France, sales climbed 1.2 percent, beating the estimate for 0.5 percent growth.

“This was a good third quarter, with comparable sales showing strong growth,” Chief Financial Officer Pierre-Jean Sivignon said on a conference call. “This third quarter confirms our good start to the year.” Analysts’ forecast for a 2.45 billion-euro full-year profit remains attainable, Sivignon said.

Chief Executive Officer Georges Plassat is pushing a plan to modernize stores and add collection points for online orders in France amid tough competition in the company’s home market. The company has also been suffering from deteriorating economic conditions in other European markets and Brazil.

"This is a good set of results for Carrefour," London-based Sanford C. Bernstein analysts Bruno Monteyne and Thomas Wharram wrote in a note. "French like-for-like supermarket and convenience sales were especially strong and hypermarkets improving."

Carrefour shares gained 1.5 percent to 23.82 euros at 9:19 a.m. in Paris. This year the stock has declined 11 percent, compared with a 9.6 percent decline in the Stoxx 600 Retail Index.

Carrefour is on track to finish store transformations by the end of the year, Sivignon told analysts during a conference call. There are encouraging signs in Chinese food sales while the company is adopting a more aggressive approach in France in terms of prices, he said.

While the improvement in French hypermarkets is positive, the quarterly number alone isn’t enough to persuade some investors that the company can return to sustainable growth without margin investment, Robert Joyce, an analyst at Goldman Sachs, said in a report.

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